A Resource Capital unit is purchasing Churchill Pacific
from Churchill Financial Holdings LLC for $22.5 million, the New
York-based real estate investment trust said today in a
statement.

CLO consolidation has picked up over the past year as
prices of the debt rebound. The activity has been largely driven
by limited new issuance, according to Scott Buchta, head of
investment strategy at Braver Stern Securities LLC. More than
$3.4 billion of CLOs backed by widely syndicated loans were
issued last year, compared with $91.1 billion in 2007, according
to Bloomberg and Morgan Stanley data.

“Some of the smaller to mid-sized managers have been
looking to cash out for a variety of reasons and other larger
managers have been looking to add cash-flow streams in order to
achieve better economies of scale,” Buchta said in an e-mail.
“Consolidating cash flows can help to reduce the impact that
fixed costs can have on manager profitability.”

The price of the highest-rated debt rose 3.5 cents last
year, Morgan Stanley data show. Yield spreads on those AAA rated
pieces contracted to 175 basis points more than the London
interbank offered rate as of Jan. 27, from a high of 725 basis
points in April 2009. Libor is the rate banks charge to lend to
each other. A basis point is 0.01 percentage point.

Apidos Capital Management LLC, a unit of Resource America
Inc., will assist Los Angeles-based Churchill Pacific in
managing the CLOs, according to today’s statement. The
transaction is expected to close this month, Resource Capital
said. Barclays Capital acted as the financial adviser to
Churchill Financial.

“We are very pleased by the opportunity this represents
for our shareholders,” Jonathan Cohen, chief executive officer
of Resource Capital, said in the statement. “We should be able
to achieve attractive risk-adjusted returns in an asset class
where we have made a substantial profit over many years.”

Christopher Allen, a co-founder of Apidos, declined to
comment.

CLOs are a type of collateralized debt obligation that pool
high-yield, high-risk loans and slice them into securities of
varying risk and return.